Canada needs to align its research spending to produce innovative commercial health products and services that benefit Canadians rather than other countries, health and life sciences experts said at Research Money’s 15^th annual conference in Ottawa.

Provinces, large urban centres and hospitals need to stop competing in health care technologies and collaborate much more, buying from Canadian firms and supporting them to build anchor companies in Canada, they said during a panel session on health and economic prosperity.

Also, the federal government must make life sciences is a priority sector for growing the economy and build an industrial strategy around that, including attracting foreign investment that benefits Canadian-owned companies, they said.

“We have the world's best scientists, or amongst the world's best scientists. We discover enormously well,” said Dr. Paul Hébert (photo at right),  president of the Canadian Institutes of Health Research (CIHR).

“But the issue is the failure to drive impact in terms of changes to health and health care, drive impact in terms of social change where it's needed, and drive impact via our economy,” he said.

When it comes to discovery research, “we cure mice well in Canada,” Hébert said.

“Do we cure people well with our discoveries? Well, not so much. Actually, they [the discoveries] go to Australia, they go to the United States especially to get the people cured.”

Going from curing mice to curing people represents a gap in Canada’s translational research, he said.

Canada’s research funding programs, including CIHR’s and the National Research Council’s aren’t sufficiently aligned with Canada’s biomanufacturing and life sciences strategy, or with provincial priorities, Hébert said. “There’s system fragmentation through the system.”

“All of us together, not just us [at CIHR] are not doing a good job for all of you, and for companies in Canada. So job number one is to organize the space in a way to drive impact,” he said.

“We actually have money. It's just misaligned. And the organization of how to deliver it is not thought through,” he added.

Canada is now spending $400 billion on health care, compared with $200 billion 15 years ago, and at this rate is on track to hit $1 trillion in about 18 years, Hébert noted.

The drag on Canada’s productivity from that kinds of spending will be huge, he said. “It’s going to be one of our biggest risks.”

Wendy Hurlburt (photo at right), president and CEO of Life Sciences BC, said the life sciences sector has been focused on funding research, unleashing capital, building infrastructure and training talent.

But the sector has “really been quite silent” on the importance of intellectual property, data and the adoption of innovation – the development side of R&D,  she said.

“Right now, we have this large, hundred-thousand-foot sweeping goal of having a robust life sciences sector. But what does that look like?” Hurlburt said.

Canada is the only G7 country without a global pharmaceutical anchor company, she noted. “But what I haven't heard is that we're all saying, ‘So we're going to have one in five years.’”

Ensuring that 20 percent of Canada’s medical supply chain comes from Canadian companies could be another goal, she added.

Canada indeed has world-class science, Hurlburt said. “Could we just stop trying to even suggest we should be competing with each other across the country? And more worry about how Canada can lead globally.”

“Our [regional] strengths are really complementary. And we need to keep that front and centre and have the benefit of that be national as opposed to trying to replicate it,” she said.

Canada needs to build an industrial base in life sciences

Heath care now amounts to 12 percent of the Canadian economy, and 20 percent in the U.S., said Dante Morra (photo at right), founder and CEO of CAN Health Network.

“Health care is the big industry of the future . . . so it’s the most exciting industry to be in [and] we should be talking about health and prosperity,” he said.

Yet despite spending 40 cents of every tax dollar on health care, “fundamentally every single day in this country, health care access and health care delivery gets worse,” he said. “The reality is that access is getting worse at every single point of the chain.”

But innovative technologies are changing the supply side of health care, Morra said. “Technology is coming to a point that makes everything possible. We are living the ‘blockbuster’ moment’ of health care.”

Canada needs to take some of the $400 billion spent on health care to drive adoption of health care products and services made by Canadian companies, to build an industrial base in health and life sciences, Morra said.

The CAN Health Network is a federally supported, national initiative that connects health care organizations with Canadian technology companies to validate, procure and scale innovative solutions that address real-world system challenges. Through its “Edge” model, the Network enables health care providers to test and adopt new technologies while helping Canadian companies grow and scale nationally and globally.

CAN Health Network has brought together 50 organizations and created a $200-billion vehicle to help procure Canadian health technologies and help scale companies in Canada, Morra said.

CAN Health Network has so far procured almost $1 billion of technologies through the network and created over 3,000 direct jobs from the scaling companies, he noted.

Studies show Canada spends at least $1.4 billion annually on health research, of which experts say less than one percent to five percent of early-stage health research ultimately becomes a scalable commercial product – a gap called the “valley of death.”

But the country can change that picture with more support for procurement of Canadian-made health technologies, Morra said.

He pointed to the company Virtual Hallway in Halifax, N.S. that has figured out how to reduce patient wait times, treatment costs and improve patient experience. The company’s platform, built for physicians, enables clinicians to directly, easily and quickly talk with each other.

Another example is Markham, Ont.-based SterileCare, a company whose solution-based technology prevents serious, life-threatening infections in catheters. A randomized clinical trial, whose results were published in JAMA (Journal of the American Medical Association) showed the technology reduced infections in patients.

One more example is Ottawa-based Fullscript, which is generating $1.3 billion per year in revenue with its platform that enables clinicians to capture actionable patient data insights, write personalized supplement plans and lifestyle recommendations, and support patient care along with way.

“We actually have to measure systems different to get a different outcome and reward those systems differently, because if you don't measure them differently [and] you don't reward them differently, you get the exact same result,” Morra said.

Hébert pointed out that many hospitals in Canada buy American-made health products when there are better Canadian-made products. “That should never happen.”

Canada’s health system has an intrinsic resistance to change, including doctors fighting against the system and unions opposed to changes that could improve the system, he added. “We are intransigent in those changes because we don’t want them to happen.”

“We're all complicit,” Morra said. “The doctors blame the nurses. The nurses blame the administrators. The administrators blame the researchers and bureaucrats.”

“We just go round and round. The reality is that there hasn't been enough discomfort to break this complex,” he said.

When it comes to foreign direct investment in Canada’s health and life sciences sector, all the panelists agreed that it’s required, but it needs to be targeted so that it directly benefits Canadian companies and Canadians, including from IP, data and other intangible assets.

Hébert noted that Canada has lost three percent of market during the last 15 years in foreign direct investment in Canada’s pharmaceutical industry. That amounts to about $2.5 billion a year and 20,000 jobs, he said.

A 2024 report by Invest Vancouver found that foreign multinational enterprises contributed $37.1 billion to B.C’s GDP from 2016 to 2022. The professional, scientific and technical services sector accounted for 40.4 percent of all foreign multinational enterprise employment gains in B.C, increasing by more than 191 percent to 67,952 jobs.

However, Morra said the test for government investing in a foreign-owned firm in Canada should be very high. “The majority of those dollars [now] go to foreign companies, which I absolutely do not understand.”

“I believe that the test should be that it should go to a Canadian-controlled company. That creates an ecosystem that draws in and crowds capital, because that's what brings in capital when you've got great companies,” he said.

Government investment should be a 10-to-1 ratio of Canadian-controlled corporations to foreign companies, he suggested, adding: “But it's the other way around.”

“I think it's the Canadian-controlled corporations that ultimately will build the wealth of Canadians and of the country,” Morra said.

Regulatory reform, new transitional research and clinical trial strategies are coming

Morra said Canada’s risk-adverse health care system in adopting new technologies should rely more on other countries’ assessments.

For example, he suggested that Health Canada should have 15 days to approve another trusted country’s approval – such as the U.K. or Germany – of a novel technology or treatment, or provide a good reason why it shouldn’t be approved in Canada.

Hébert said that regulatory reform is underway and change is coming.

The CIHR is working with partners on a new translational research strategy looking at the Small Business Innovation Research program in the U.S. as one model, he said. The competitive program provides billions of dollars in early-stage, non-dilutive funding to help innovation startups commercialize new technologies and meet federal agency needs.

The CIHR and partners also are working on a new clinical trial strategy to help more Canadian patients get access and to support their participation in clinical trials of innovative new drugs and other treatments.

The strategy includes the Accelerating Clinical Trial Canada Consortium, a pan-Canadian platform designed to strengthen coordination between domestic and international research networks.

The strategy also mandates the meaningful inclusion of historically underrepresented populations (such as women, children, Indigenous communities and equity-seeking groups) and requires the collection of disaggregated demographic data.

In addition, Prime Minister Mark Carney has asked for a task force on life sciences and pharmaceuticals, Hébert said. “There’s a high probability that we will get more investments in this.”

Hurlburt said Canada lacks data about the size of the country’s life sciences sector and its economic contribution to Canada’s economy, which is a challenge in trying to convince the federal government to make the sector an industrial and economic priority.

The life sciences community also has to clearly define its “North Star” of where it wants to focus its life sciences sector and what that sector should do, she said.

Morra said Canada needs a “moonshot” in life sciences, and investing in Canadian companies is the best bet. “We will win globally, but we actually have to put double effort into the commercialization side, while we're holding the research side to ensure that piece goes forward.”

“So I think the answer is always bet on ourselves and stop being apologetic and let's win,” he said.

In 2024, HealthCareCAN, the national association that represents hospitals, health research institutes, health authorities and other health care associations across Canada released a report, A National Vision to Transform Health Research in Canada, aimed at driving solutions for improved health care outcomes.

One of the report’s four key objectives was to “revolutionize health outcomes through innovative adoption, translation and implementation of research.”

It is important to establish an active and evolving research environment where funding streams facilitate the progression of innovative ideas from the initial stage of conception all the way through to their commercialization, the report noted.

Obstacles that impede a seamless transition for health research funding, innovation grants and support commercialization for research must also be removed, the report said. “This includes ensuring that research funding mechanisms and innovation grants are aligned to support the entire innovation continuum, from conception to commercialization.”

Panel moderator Michelle McLean (photo at right), CEO for HealthCareCAN, said if the life sciences community can move with one voice to government “with this North Star, with this idea that Canada can achieve more, there’s a real opportunity that I don’t think will exist again for some time.”

“So if there is a moment, the moment is now for this community.”

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